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Vivian Xie
5 Apr 2024

First offers for pharma from Medicare drug price negotiations

Ten high-cost drugs from various pharma manufacturers are in pricing negotiations in a first-ever for the US Medicare program. President Biden’s administration stated they have responded to the first round of offers. 

In 2022, the Biden administration brought the Inflation Reduction Act into effect, with the aim to provide better and more equitable access to healthcare in the US. Part of the Act allows for Medicare to negotiate prices on prescription drugs for those on the federal health program aged 65 and above and/or are disabled.  

The Centres for Medicare and Medicaid Services (CMS), the agency that oversees the Medicare program, selected the initial ten drug products for price negotiations in August 2023, and gave initial price offers in February 2024. The companies involved with these products had until March 2024 to respond. Companies can meet with the CMS up to three times for negotiations, after which final prices will be revealed on August 1, 2024. These prices will then come into effect in 2026 for those involved.  

Companies with drug products in initial negotiations include Bristol Myers Squibb, Pfizer, Merck, Johnson & Johnson, AbbVie, Amgen, Boehringer Ingelheim Eli Lilly, and Novo Nordisk. However, not every pharma organisation is keen to negotiate smoothly This past March, AstraZeneca’s challenge to these price negotiations was rejected by a federal judge in Delaware after AstraZeneca was due to respond to an initial bid on the diabetes drug Farxiga. Such rulings have set precedents for the government when handling pharmaceutical companies looking to challenge the program on various grounds, including the stripping of property rights.  


1. US takes next step in Medicare drug price negotiations with pharma companies [Accessed April 5, 2024] 

2. Second judge upholds medicare drug price negotiation program [Accessed April 5, 2024]  

Vivian Xie
Editor - Custom Content

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